Press Release: New CSS Report Explores the Social Housing Finance Strategy Growing across the Country and Models the Approach for NYC

Press Release

New CSS Report Explores the Social Housing Finance Strategy Growing across the Country and Models the Approach for NYC

Report offers a blueprint for how the next NYC Mayor can build Social Housing

New York City is in the midst of an unprecedented housing crisis, marked by record-low vacancy rates for affordable units, rising homelessness, overproduction of luxury housing and a development model that consistently fails to meet the needs of the lowest-income New Yorkers. The next mayor will have an opportunity to change that, by moving away from the current profit-driven housing model to one that seeks to build permanently affordable housing based on equity and stability.

A new Community Service Society of New York report, Can New York Build Again? A Blueprint for a New Era of Social Housing, outlines a strategy for creating and funding a robust, city-led social housing program designed to produce permanently affordable, high-quality, mixed-income communities. The report draws on social housing programs in both the United States and abroad, including:

• Montgomery County, Maryland's Housing Opportunities Commission and their Housing Production Fund (HPF)
• The United States Treasury Department's Federal Financing Bank (FFB) and U.S. Federal Housing Agency (FHA)'s Risk Share Program
• Helsinki, Finland's Jätkäsaari development plan
• Singapore Housing Development Board
• Atlanta's Urban Development Corp

These programs and agencies provide a real path for the next NYC mayor to take while working to address the housing crisis. Key to this new approach to social housing in New York City will be a funding source that avoids the costly and time-consuming pitfalls of the existing affordable housing system.

"New York City is in an affordable housing crisis that is straining thousands of family's finances and pushing working-class New Yorkers out of our city ," said City Comptroller Brad Lander. "Generations ago, our City and State worked together with community and union leaders to develop thousands of units of social housing across the five boroughs. This report provides next steps to put our City on a path to build on that foundational legacy so that future generations can truly afford to stay and thrive."

"To effectively address the housing affordability crisis, we must pursue innovative solutions that expand access to quality, affordable homes. I want to thank CSS for their thoughtful recommendations to both preserve our existing affordable housing and create new opportunities for residents. That's why I introduced legislation to establish a city land bank, allowing us to acquire and repurpose distressed properties for public benefit. Thank you again to CSS for being a strong research and advocacy partner in our shared mission to solve the housing crisis," said City Council Member Gale Brewer.

"New York's housing shortage is fueled in large part by the greed of profit-driven developers," said Council Member Sandy Nurse. "It's time to move our city away from speculative practices and toward people-centered housing solutions. Social housing is how we build stable communities and create a city that truly belongs to all of us. Grateful to the Community Service Society for releasing this important blueprint for how we get there."

"The next Mayor of the City of New York will face some of the most consequential issues in the city's history," said David R. Jones, CEO and President of the Community Service Society (CSS). "This report provides a feasible pathway to strengthen NYC communities now and in the future."

"New York City has the most committed and talented civil service devoted to the development and preservation of affordable housing," said Iziah Thompson, Senior Policy Analyst at Community Service Society (CSS) and author of the report. "Like many other communities abroad and a growing number in the United States, our city can have government compete in the real estate market, prioritizing affordability, sustainability, and long-term stability."

The Core Problem: A Broken and Overstretched System:

According to the report, at the core of New York's housing crisis the city's overreliance on a speculative housing market and complex public-private partnerships. This system is driven by the need for developer profit, which creates a vicious housing investment cycle where construction booms in good times but halts when the need is greatest. The result is an inadequate supply of truly affordable housing and a system that cannot effectively serve households with the lowest incomes.

With the next mayoral administration in mind, the report lays out a multi-pronged strategy to build a new, parallel housing system that complements private development with a powerful public option. The cornerstone of the proposal is the creation of a city-backed Revolving Housing Construction Fund (RHCF). This fund would be capitalized with public money to provide low-cost loans for housing construction, replacing the need for expensive private equity. By taking private profit out of the equation, housing projects can achieve deeper and more permanent affordability.

The report proposes an initial goal of financing 20,000 new, publicly owned social housing units over the next decade.

To illustrate how a city-level RHCF could replace the expensive private equity model that is a feature of most housing financing capital structures, the report describes three examples of how the RHCF could be used in practice with comprehensive financial modeling:

Project 1: The Rescued Brooklyn Infill: The city uses the RHCF to take over and complete a stalled 100-unit market-rate development in a high-rent Brooklyn neighborhood. The finished building includes a mix of market-rate and deeply affordable, voucher-supported units, generating strong cash flow to cross-subsidize other projects.

Project 2: Resident-Led NYCHA Preservation: At a large NYCHA development, residents lead the planning for a comprehensive, sustainability-focused rehabilitation of their homes. The project includes constructing a new infill building with over 100 mixed-income units-for existing residents, formerly homeless families, and union workers-while the original buildings undergo deep energy retrofits.

Project 3: Deep Affordability on Public Land: On a vacant, state-owned lot in the Bronx, the RHCF fully finances a new 100+ unit building. Because it doesn't need to support conventional debt, the project achieves deep affordability, with nearly 70 percent of units reserved for families with very low incomes.

The RHCF is one piece of a multi-pronged strategy to address the city's housing instability and shortage of affordable units. The report provides a set of recommendations that within the next decade could turn back the tides of displacement that threaten to make city's housing crisis even worse:

• Create a city-backed Revolving Housing Construction Fund (RHCF)

• $500m city capital initially ($100m every 3 years)

• 10-year plan: 200,000 new units, taking advantage of LIHTC Expansion

• 10 percent - 20,000 Social Housing units

• Improve NYCHA's Board Structure and Add Ten Members

• Realign City Housing Agencies to Increase Efficiency

• Undo Exclusionary Racist Zoning Rules

• Create a Citywide NYCHA Zoning Overlay (or Amend the Zoning Resolution for As-of-Right Development)

• End Single-Family Zoning in NYC

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